Opinion: With surplus in school aid fund, Legislature needs to reject severe cuts in K-12 education

We call on the Legislature to restore most of the funding that public schools would lose. At the same time, we call on local districts to do their part in balancing their budgets by tackling the kind of necessary cost-cutting that’s overdue.

It’s been clear in recent weeks, as the Republican-controlled Legislature pushed through other parts of Snyder’s budget plan, that even his loyalists have found his cuts to K-12 education too drastic to accept.

And rightly so. While the governor is betting on a huge tax cut for businesses to create new jobs — a proposition there’s no hard evidence to support — we think the state needs a more balanced approach that recognizes that quality of education and quality of life are at least as much a factor in economic growth as the business tax rate.

Here in Washtenaw County, we are fortunate to have some of the best public schools in Michigan, and financially eviscerating them is exactly the wrong direction for the state to be headed in right now. Protecting funding for schools should be the Legislature’s first priority as it finishes work on the 2012 budget.

The first step would be a commitment not to raid the school aid fund. In his proposed budget, Gov. Snyder essentially treats the state’s general fund and the school aid fund as a single pot of money. He called for dipping into the school aid fund to the tune of $900 million to reduce funding cuts to other areas, including community colleges and four-year universities.

We object to this siphoning of the school aid fund, which is a repeat of what lawmakers did to public schools years ago when they used lottery money as an excuse to shift other funds away from K-12 education - except this time it’s being contemplated on a much grander scale. This shouldn’t happen. Local schools have been put in a position where they rely on the state for most of their funding, and the state should live up to its commitment to them by keeping the school aid fund intact.

Beyond that, we are convinced that even with all the harsh choices facing lawmakers, there is sufficient funding to avoid anything nearly as deep as the $470 per pupil cut in funding that Snyder originally proposed for public schools.

Especially since last week’s biannual revenue estimating conference in Lansing found that the state will end this fiscal year with more than $400 million in additional revenue, it should be possible to reduce the funding cut to K-12 to somewhere between $100 and $200 per pupil. Last week, the governor and Republican lawmakers reached an agreement that would result in an effective cut of $270 per pupil for public schools, which is less severe, but still too deep of a reduction.

That being said, local schools still should be prepared to accept some loss of funding, and deal with it by reducing their operational costs in ways they haven’t so far.

For one thing, the unexpected surplus that the state is realizing this year is a one-time gain, driven largely by a rebound in the domestic auto industry. Given high gas prices and potential interruptions in the auto supply chain due to the earthquake in Japan, we can’t count on that continuing. Gov. Snyder is right to suggest that some of this unexpected tax revenue should go into the state’s rainy day fund or pay down debt.

Beyond that, all areas of the state budget are suffering, and local schools have to share the budget pain - just not to the degree the governor proposed. In exchange for less drastic cuts, school districts can balance their budgets if they do more to rein in costs. Two areas, in particular, must be addressed.

One is employee health care costs. The state Senate is taking on that issue on behalf of local districts, approving a bill that says public employers — whether at the local level or the state level — could not pay more than 80 percent of the health insurance premiums of their employees. This would bring public employees more in line with the private sector, and save public employers in Michigan an estimated $500 million annually. Though we’d prefer to see this accomplished at the bargaining table, one way or another, it has to happen.

The other area of big potential savings for local schools would be in the consolidation of non-instructional services. This is a proven money-saver that districts have moved far too slowly on. In Washtenaw County, school districts have consolidated a number of services, but there’s potential for much more. For instance, when the Washtenaw Intermediate School District offered to run a consolidated bus system, only three of the county’s public school districts agreed to participate.

The time has come for schools to take a hard look at all back-office services and consolidate as much of that as possible. If they don’t, then the state should prod them more aggressively. Gov. Snyder says he’ll put more emphasis on school consolidation issues in his 2013 budget, but we think the time for that is now. And the state should not only be providing financial incentives for districts to consolidate non-instructional activities, it should offer clear, specific guidance on how that can be achieved.

The studies we’ve seen suggest that of all the factors that lead to economic health these days, a well-educated populace is the most important indicator. This is not the time to be disinvesting in education. The public isn’t willing to accept deep cuts to public schools, and the Legislature should be either.

(This editorial was published in today's newspaper and reflects the opinion of the Editorial Board at AnnArbor.com.)